It probably doesn't feel like it, but nearly two-thirds of home sales contracts actually close without delay. That remaining third tends to dominate industry chatter and real estate professionals’ minds, however, creating tension and stress for months before the deal is actually done.
In reality, however, many of the main reasons that closings are delayed could be avoided in most scenarios. Here are the top three avoidable closing delays reported by real estate professionals today:
Delay 1) Inspection Issues Nearly one in 10 deals confront potential delays because home inspection problems surface after an offer has already been made and accepted. While this is certainly frustrating, in many cases it could be avoided (assuming the sellers’ have the financial wherewithal to address the issue) with a pre-market inspection that would help prevent surprises.
Delay 2) Problems with Financing For some real estate professionals, this issue is so big that they are not even willing to consider buyers that have not already been pre-qualified. If this describes you, then pre-qualification may be a good requirement for a sale. However, you will need to carefully evaluate how this requirement will affect whether or not your potential buyers even opt to view the home and decide if the sacrifice of volume is worth peace of mind and a predictable closing.
Delay 3) Title Complications Some of the savviest real estate investors we know actually do two title searches on every property before they buy specifically because title complications are so much more common than you would expect them to be! While you might think a title should be cut and dry – either clear or not! – in many cases, there may be one or more liens on the property that the owner may not even be aware of, and those liens may not always agree in order of precedence. Checking title every time will save you serious headaches later.
- Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.